Ag appropriations on the move

With help from Catherine Boudreau, Liz Crampton, Doug Palmer and Megan Cassella

AG APPROPRIATIONS ON THE MOVE: The House voted Thursday to go to conference over a spending package likely to include USDA and FDA appropriations, a big step toward passing a new bill with fresh funding forthose agencies on time.

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That’ll happen only if negotiators move fast and avoid blowups over narrow policy disputes that are all too common in spending talks. Speed will truly be of the essence — the September legislative calendar includes only seven combined working days.

How we got here: The Senate in August passed a four-bill appropriations package including the Agriculture-FDA measure. The House never passed its own version of the Agriculture-FDA bill, but it did pass two other measures in the Senate package, funding the Interior Department and Financial Services programs. Now, lawmakers are going straight to conference, where the aim is to finalize all four of the measures before current appropriations expire at midnight Sept. 30, Republican and Democratic aides said.

Staff-level talks over differences in the House and Senate Agriculture-FDA measures have already begun, a House Democratic aide tells MA.

It’s part of a broader push by lawmakers to clear as many spending bills as possible before they’re forced to take up a stopgap “continuing resolution” for measures that didn’t pass to avert a government shutdown. Pro’s Jennifer Scholtes and Sarah Ferris have more on this month’s spending sprint here.

Shutdown watch: POLITICO’s Rachael Bade reports on an unusual split within the hard-line House Freedom Caucus over how hard it should push to get money for President Donald Trump’s promised U.S.-Mexico border wall included in the CR.

Caucus Chairman Mark Meadows has cautioned against pushing the government to the brink of a shutdown a month before the midterm elections. But Rep. Jim Jordan, the group’s co-founder and staunch Trump ally, is itching for a fight.

TRADE AID MEETS THE SPENDING SEASON: The Trump administration has asked Congress to include language in any upcoming continuing resolution that would ensure the Commodity Credit Corporation — the agency facilitating a key part of USDA’s trade assistance program — has flexibility to keep payments flowing to farmers in the coming months, according to GOP sources.

Here’s how it works: The CCC can borrow up to $30 billion from Treasury to finance its programs, including the $4.7 billion in direct payments USDA is set to provide soybean, corn, wheat, cotton, sorghum, dairy and pork producers hurt by retaliatory tariffs. With another round of payments potentially to come, along with other annual CCC obligations, the White House is warning the agency could breach its credit limit at Treasury in the next few months — meaning all payments to farmers and ranchers would be frozen.

Congress typically pays down the agency’s tab through the annual Agriculture-FDA spending bill, but it’s an open question whether that measure will be signed into law on time this year. That’s why the administration wants a CR provision to accelerate reimbursement of CCC in case the stopgap funding process stretches into December and beyond, as it often does.

CCC’s role in the trade relief plan goes beyond the direct payments to producers, but it’s unclear how much other aspects of the plan, like market development or commodity purchases, contribute to or could be exposed to the agency’s financial strain.

One more thing to note: It’s not clear how directly the request is tied to the new tariff relief package, but the same language has been used at least once before, in 2016, when CCC also faced financial strain.

BIG FOUR FAR APART IN FARM BILL TALKS: Senate Agriculture leaders on Thursday suggested the farm bill proposal House Agriculture Chairman Mike Conaway offered — which the Texas Republican described as a “significant compromise” — didn’t go far enough and that efforts to reconcile the Senate and House bills had become a slow-go.

Senate Agriculture ranking member Debbie Stabenow described Conaway’s offer as not “even close to being something the Senate could accept.” She added that major differences remain unresolved within the Supplemental Nutrition Assistance Program and the commodity, conservation and energy titles.

Senate Agriculture Chairman Pat Roberts (R-Kan.) also signaled that negotiations aren't as far along as some had hoped with time running short. As of today, only seven combined legislative days remain before Sept. 30, when the current law expires. Further tightening that timeframe is the fact the House is scheduled to be out of Washington for the entire week beginning Sept. 17, which leaves Congress little time to handle other big issues, such as negotiating a spending deal to keep the government operating in fiscal 2019.

Roberts basically said things went in reverse for the four principals after they had a “very good conversation” on Wednesday. “Today, that walked back a little bit," Roberts told reporters following their meeting Thursday.

RURAL AFFORDABLE HOUSING ‘CRISIS’ LOOMS: Availability of affordable housing is an issue one hears about most often in connection with urban areas, but experts predict there’s trouble on the horizon for hundreds of thousands of rural residents who live in USDA-subsidized homes. The Housing Assistance Council examined the problem in an expansive new report that was commissioned by USDA.

Back in 1963, USDA started subsidizing mortgages for developers to provide rental assistance to low-income people, mostly the elderly and disabled. Tenants living in multifamily units receiving USDA loans are also eligible for rental assistance, which many of them take up.

But those loan terms are poised to end in the next few decades as they were set on 30- to 50-year repayment plans. As mortgages “mature,” developers can then exit the program and hike up rents to market rates, potentially displacing hundreds of thousands of people.

The so-called Section 515 program touches nearly every corner of the country: 87 percent of counties in the U.S. have at least one USDA-sponsored property. Today more than 13,000 USDA-mortgaged properties provide in excess of 415,000 affordable homes for families and individuals, the report says. By 2050, nearly all properties participating in the program are estimated to drop out.

“At nearly all intersections, the coming wave of maturing mortgages is a crisis,” the report states.

REPORT SHOWS CONSERVATION CAN PROMOTE PROFIT: Conservation practices like no-till and cover crops can deliver annual returns and increased yields for farmers, as well as improved value for landowners, bankers and crop insurers, according to a report from the Environmental Defense Fund. The group contracted with accounting firm K-Coe Isom to conduct a case study of three farmers to examine how conservation efforts affected their bottom lines. Results from that analysis were then compared with 10 other farms in the firm’s finance programs.

The report found that conservation practices can impose cost increases, such as paying for cover crop seed, but yield cost savings in other categories, like decreased fertilizer costs as a result of planting cover crops, creating a net positive return. But there’s not a one-size-fits-all for conservation plans, and it takes time to find the right combo of practices and management adjustments, the research concluded.

Why this matters: The analysis aims to provide a foundation for making a case for increased investment in USDA conservation programs. Currently there’s a lack of comprehensive data on environmental and financial outcomes from conservation practices.

Farm bill breakdown: The farm bill conference committee is negotiating to reconcile two very different conservation titles. The House measure, H.R. 2 (115), proposes close to $1 billion in cuts to the conservation title over a decade, and would merge parts of the Conservation Stewardship Program into another incentive-based conservation initiative, the Environmental Quality Incentives Program. The Senate legislation, S. 3042 (115), on the other hand, keeps funding consistent across the title and leaves in place CSP, which encourages long-term conservation practices.

ROW CROPS:

— NAFTA talks to continue today: Canadian Foreign Minister Chrystia Freeland will return to USTR’s Winder Building today for more talks with U.S. Trade Representative Robert Lighthizer after a 15- to 20-minute meeting Thursday evening to discuss a couple of the difficult remaining issues “face to face.” The two also met for a few hours earlier on Thursday. Freeland declined to tell reporters how close the two sides are to a deal.

— What’s Trump’s next trade move against China? Thepresident could move to impose new tariffs on $200 billion worth of Chinese goods as early as today after a public comment period ended at midnight on Thursday. The proposed tariffs, if implemented, would bring the total value of Chinese goods Trump has hit with tariffs to about $253 billion — or about half of current U.S. imports from the Asian manufacturing giant. China, in turn, has threatened to retaliate on another $60 billion worth of U.S. goods, bringing its total to about $113 billion of its $130 billion in imports from the U.S.

— Industry mounts unified anti-tariff push: Hours before the public comment period ended, more than 150 business and industry groups banded together to present a unified front to pressure the Trump administration against imposing the tariffs, warning that doing so would likely backfire on the same businesses and workers it’s trying to help. “Unilaterally imposing tariffs on hundreds of billions of dollars in goods invites retaliation and has not resulted in meaningful negotiations or concessions,” the groups, including several from the food and ag space, said in a letter to Lighthizer. Pro Trade’s Doug Palmer has more here.

— More tariff pushback: Beyond the broad-based coalition letter, dozens of business groups representing other industries also came together to submit comments to Lighthizer as an industry and warn him of what they saw as the harmful effects of the tariffs, particularly to consumers. Groups representing agricultural producers, suppliers, manufacturers, retailers and restaurants wrote a letter, for example, warning that tariffs threaten to raise the costs of basic food items and “will disproportionately harm low and middle-income American families while putting at risk hard-won, efficient supply chains that feed a complex and vibrant economic system.”

— New FDA plans for honey, syrup labels: The agency is shifting its approach to labeling added sugars in honey and maple syrup after complaints that consumers could be confused. FDA Commissioner Scott Gottlieb said Thursday that his agency will issue final guidance on the matter early in 2019, as Pro Ag’s Helena Bottemiller Evich explains.

— USDA sued over cat experiments: Right-leaning animal advocacy group White Coat Waste Project filed a federal lawsuit seeking new information from USDA about experiments on cats at a facility in Beltsville, Md. The group previously revealed USDA was infecting kittens with a parasite and later euthanizing them. Lawmakers have asked USDA to find new ways to conduct the experiments and to begin releasing the cats for adoption instead of putting them down. The Washington Post has the latest.

— Dems question ERS, NIFA relocation plans: House Appropriations Democrats who oversee USDA spending are questioning Secretary Sonny Perdue’s plans to move the Economic Research Service and National Institute of Food and Agriculture out of D.C. Democrats on the Agriculture-FDA Subcommittee, in a letter released Thursday, asked Perdue for the data and analysis behind the plans and warned that the move has “jeopardized morale” across the department as workers at other agencies wonder if they’re next. Also, more than 100 research groups and universities sent their own letter Thursday to appropriators and farm bill writers asking Congress to delay the NIFA move until USDA provides more answers.

— GMOs vs. gene editing: Peter Beetham, a plant scientist and CEO of the agricultural biotech firm Cibus, claims GMO use has been a scientific “stopgap” until precision gene editing became advanced enough to modify crops without transplanting genes from other organisms. “Scientists can now develop new crops the way nature would do it given enough time,” Beetham writes in Scientific American.

— Red tide brings underwater dead zone: In the Gulf of Mexico off Florida’s southwest coast, rotting fish and algae blanketing the seafloor are creating a dead zone, according to local scientists who explored the underwater area. The Fort Myers News-Press has the story.

About The Author

Ryan McCrimmon is an agriculture and food policy reporter and newsletter writer for POLITICO and POLITICO Pro. He was previously a tax and budget reporter for Congressional Quarterly and Roll Call, and before that he covered the Texas state legislature in Austin for the Texas Tribune. Ryan graduated from Northwestern University, where he studied journalism and Middle Eastern politics and history. He also covered Big Ten sports for the Northwestern News Network and Big Ten Digital Network. Ryan was born and raised in Charlottesville, Va.